Saturday, December 28, 2013

A Heartwarming Tale of a Medtech Company Turning Itself Around

Here's a Boston Scientific article recently published at the Motley Fool. Read it here.

The past couple of years have been tough on medtech companies. Few of the industry leaders that derive their revenue solely from medtech sales have had a rougher time than Boston Scientific Corporation (NYSE: BSX) . While industry stalwart Medtronic, Inc. (NYSE: MDT) has posted steady gains, Boston Scientific has been losing ground over the past 5 years.

Losing heart

The cardiovascular segment remains the company's largest, but sales during the third quarter of 2013 were a paltry $667 million; that would be $2.67 billion on an annualized basis. In 2007, that figure was $6.56 billion. That is a slight improvement over 2012's dismal performance, however, when the company's share price nearly fell through the $5 dollar range.

The intensely competitive fields, cardiac rhythm management (CRM) and interventional cardiology, still represent the majority of the company's sales. The bleeding has stopped from the CRM segment, but growth is currently flat. Bringing those numbers up will be a difficult task going forward. Over the past several years, Medtronic also had difficulty achieving growth in its CRM segment. Its sales in the most recent quarter were up 4% year over year at $1.27 billion, however. Odds are that Boston Scientific will continue to operate in its shadow.

Pounce on the weak

Although Boston Scientific might not be stealing Medtronic's piece of the CRM market, St. Jude Medical Inc.'s (NYSE: STJ) grip has been slipping.